**GBP/USD Range Bound after Failed Upside Attempt: UOB Analysis**
*By FXStreet Team*
The GBP/USD pair entered this week showing signs of consolidation, as currency markets digested recent macroeconomic data and central bank communications. After flirting with key resistance, GBP/USD failed to sustain its upside momentum and is now finding itself confined to a familiar range. Analysts at United Overseas Bank (UOB) shed light on the underlying technical and fundamental factors keeping the pair range-bound, and what traders can watch for as the week unfolds.
### Market Recap: GBP/USD Fails to Break Higher
GBP/USD started the previous week with a burst of optimism, fueled by improved risk sentiment and a marginally weaker US Dollar. The pair attempted to clear the psychological hurdle near 1.2700, spurred in part by a bounce in UK economic metrics and a broader correction in the greenback. However, this move was not sustained. Over the following sessions, sellers re-emerged, dragging GBP/USD back toward its well-worn trading zone.
Key highlights from the recent price action:
– **Upside attempt halted:** GBP/USD tried to break above 1.2700 but faced heavy resistance, leading to a swift rejection around this area.
– **Range trading resumes:** Since the failed breakout, the pair has been oscillating in the 1.2620–1.2700 region.
– **Muted volatility:** Price action has been subdued, with daily ranges contracting compared to previous weeks.
### Technical Perspective: UOB’s Analytical View
Analysts at UOB provide a detailed technical assessment of GBP/USD, identifying crucial support and resistance levels and projecting possible near-term scenarios.
#### Trend Overview
– The pair remains capped below the mid-1.27 territory, unable to extend its recent gains.
– Buyers are entering near 1.2620/40, forming a short-term base.
– The absence of a clear directional trigger has led to consolidation between these boundaries.
#### Support and Resistance Levels
**Immediate support:**
– 1.2620: This level has acted as a floor during recent pullbacks and stands out as the initial area for buyers to defend.
– 1.2580–1.2600: Below 1.2620, further support is likely to materialize, limiting the scope for deeper retracements.
**Immediate resistance:**
– 1.2700: This remains a critical resistance for GBP/USD. Multiple failed attempts make it a focal point for traders.
– 1.2740: Should 1.2700 be breached, further gains could extend toward this upper boundary.
#### Technical Indicators
– **Momentum oscillators**: Neutral to mildly negative, supporting a sideways bias in the near term.
– **Moving averages**: The 20-period and 50-period Simple Moving Averages (SMAs) continue to flatten, indicative of a lack of trend.
– **RSI**: Relative strength index readings hover around the midpoint, suggesting an equilibrium between buyers and sellers.
#### Chart Patterns
– The recent candles show upper and lower wicks, highlighting intraday reversals and failed directional moves.
– No clear breakout or breakdown signals are present on the daily timeframe.
### Fundamental Backdrop: What’s Driving the Range?
Behind the technical picture, several fundamental developments are feeding into the current range-bound behavior.
#### US Dollar Dynamics
– The Greenback retreated from recent highs, pressured by softer economic data and changes in Federal Reserve expectations.
– Market participants have dialed back their bets on immediate Fed rate cuts, but a mixed US economic picture has yet to provide a decisive push for USD strength.
#### Bank of England Policy
– The Bank of England (BoE) has maintained its cautious stance, awaiting further confirmation before signaling any change to its interest rate outlook.
– UK inflation remains a concern, but softer recent prints call into question the timing and trajectory of future BoE action.
#### UK Economic
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